Last updated on May 30, 2023
Producthero Labelizer: forcing Google Smart Shopping / Performance Max to be more efficient
Producthero Labelizer offers merchants a solution to the problem of losing control when using Smart Shopping or Performance Max campaigns in Google Ads. This solution forces Google’s Smart Shopping / Performance Max algorithm to make more efficient choices.
Advertisers already using the solution are seeing improvements of up to 30% and more. Advertisers such as Rituals and G-Star RAW, among others, took part in the test process. The advertising costs are distributed more efficiently among the products. This is because sharper choices are made in the products that are put in Google’s shopping window.
FIND OUT HOW IT WORKS IN LESS THAN 2 MINUTES
WHY THIS SOLUTION?
More than half of the advertising webshops in Google now use Smart Shopping campaigns (will in Summer of 2022 be upgraded to Performance Max). By using this campaign type, the advertiser leaves the optimization to Google. Within a Smart Shopping campaign, an advertiser has very little control and insights.
In Smart Shopping Google has developed a powerful algorithm that takes over the optimization completely from the advertiser and expands the reach to Youtube, Gmail and the Google Display Network. Recent research by Producthero shows that Smart Shopping campaigns give better results for most advertisers than regular shopping campaigns.
Producthero conducted research among its advertisers and found that Smart Shopping gives better results for most online stores than regular shopping campaigns. Nevertheless, a number of interesting insights emerged that apply to almost all advertisers:
- 50% of the costs go to products that are underperforming: they cost the advertiser money
- 80% of sales come from less than 10% of products
- More than 60% of the products are ‘sleeping’: they hardly get any impressions and clicks
HOW DOES THE SOLUTION WORK?
By using Producthero Labelizer, the advertiser achieves more revenue at the same cost. The solution analyzes the behavior of the products on a daily basis. It then ensures that advertising costs are reduced on products that are underperforming. Sleeping products are activated and the best performing products are given more space to be displayed.
Producthero Labelizer analyzes the behavior of the products on a daily basis and categorizes them into 4 personas:
The product personas explained:
HERO – Less than 10% of products generate more than 80% of sales. With the right treatment, these products become ‘superheroes’ and generate even more sales.
VILLAIN – Around 50% of advertising costs go to products that don’t perform well. The advertiser literally loses money here and can save by giving them less budget.
SIDEKICK – Some products do quite well, but at low volume. With the right treatment, they will generate more sales.
ZOMBIE – More than 60% of the products are ‘sleeping’: they get almost no impressions and clicks. By activating them, they can generate revenue.
THE EFFECT OF USING LABELIZER
By using Producthero Labelizer, the advertiser achieves more conversion value at the same or conversion value / cost ratio:
- More revenue is generated by better bringing out Heroes and Sidekicks and activating Zombies.
- Costs are saved by reducing ad spend on Villains.
Several clients are already seeing performance increases of up to 30% and more.
Take for example this client, who split tested using Smart Shopping campaign against using Smart Shopping + Producthero Labelizer:
Because the inefficient cost on villains is strongly reduced, the total cost of this advertiser goes down. On the other hand, by treating Heroes and Sidekicks the right way and activating Zombies the overall revenue goes up. It ended up in a revenue increase of 44,4% while ROAS increased 15,3%.
One can see the shift by analyzing the spending behaviour of the different product persona’s when Labelizer is activated. This is how it looks like:
HOW CAN I START?
Producthero Labelizer is available in Producthero’s Shopping Ads PRO Toolbox, which is available for all advertisers on Producthero CSS.
Check out Producthero.com/Labelizer for more information.